Based on Sargent & Lundy’s due diligence, Macquarie Asset Management, the world’s largest infrastructure investment firm, recently acquired a 40% stake in five of Dow Inc.’s power generation and pipeline assets in Texas and Louisiana.
The $2.4 billion acquisition includes a portfolio of power generation, distribution, pipeline, storage, environmental systems, and other infrastructure serving Dow and other industrial customers across the U.S. Gulf Coast. The newly created partnership, Diamond Infrastructure Partners, seeks to grow beyond its existing customer base and provide the energy and infrastructure needed with a focus on operational efficiencies, reliability, and safety.
The total value of the acquisition could increase to $3 billion if Macquarie exercises its option to increase its equity stake to 49% within six months of closing.
“We have a great depth of experience in providing design reviews and asset inspections for virtually every type of generating technology in operation. Our clients can have a strong level of confidence and assurance in our findings,” said Patrick Daou, Sargent & Lundy’s project director for the assessment. “Macquarie is making a significant investment in these assets, and we were able to provide them with the data and information they required to undertake this acquisition.”
Sargent & Lundy’s team conducted an extensive review of the power generating equipment and other infrastructure to determine their technical specifications, reliability, operating costs, and the potential need for long-term improvements at each of the five locations. The team looked at data for operations and maintenance, plant performance, financial models, environmental permitting and compliance, and other performance indicators and potential liabilities.
Macquarie prioritizes investments in high quality, essential assets that can be improved over time and deliver growth and reliable service to customers. It manages and operates industrial parks, regulated utilities, and other industry-oriented infrastructure platforms. Over the last 21 years, Macquarie has invested or committed more than $21 billion in 54 portfolio companies across the Americas.
“As a long-term owner of essential infrastructure, we recognize the value that can be unlocked through the development of infrastructure platforms like Diamond Infrastructure Solutions,” said Global Head of Macquarie Asset Management, Ben Way. “We believe our significant infrastructure experience and capabilities, coupled with Dow’s operational excellence, will deliver additional efficiencies and long-term growth.”